AB 204 Course Great Wisdom / tutorialrank.com AB 204 Course Great Wisdom / tutorialrank.com | Page 4

Assume the market price is currently $2. What problem would occur
in the market due to this price? Will it be shortage or surplus? What
will its effect on the price? Indicate this on the supply and demand
graph.

2) Consider supply and demand schedules for Alaska Salmon
indicated in the following tables to answers questions from a –d
below.

Referring to the schedules of supply and demand, what is the
equilibrium price of Salmon? What is the equilibrium quantity of
salmon demanded and supplied at the equilibrium price?

Second, assume that Alaskan Salmon can also be sold in UK. The UK
demand schedule for salmon is as follows:

Refer to the combined U.S. and UK demand schedule, the U.S.
demand schedule and the supply schedule, and analyze the change in
the market for salmon .What will happen to the price at which
fishermen can sell salmon? What will be the final output of salmon?

After UK joins the market demand for salmon, what will happen to
the price U.S. consumers pay for salmon? What will happen to the
q uantity of salmon consumed by U.S. consumers?

3) Assume Atlantis is a small, isolated island in the South Atlantic.
The inhabitants grow potatoes and catch fresh fish. The